05/02/1995 03:36 PM STA

SSTA - 5/2/95
SB 163 APPROVE U OF A DEBT FOR STUDENT HOUSING
SENATOR SHARP brings up SB 163 as the next order of business before
the Senate State Affairs Committee and calls the first witness.
JOSH FINK, Aide to Senator Kelly, prime sponsor of SB 163, states
he will testify on SB 163 and SCR 14 at the same time, since they
are on the same subject. Both pieces of legislation have been
introduced to deal with the shortage of student housing in the
University of Alaska system. The three campuses with serious
housing shortages are Anchorage, Juneau, and Ketchikan. The
University, a number of legislators, and AHFC have been working
together to establish a loan agreement to meet the university's
housing needs. AHFC's mission is to help meet the housing needs of
persons with low to moderate income, and most students are in that
group. Mr. Fink thinks this agreement will be beneficial to all
parties involved.
Number 467
SENATOR LEMAN asks, based on today's market rate for bonding, what
subsidy the university will be receiving at 3%.
Number 470
MR. FINK responds there is a spreadsheet in members' bill packets
showing that information.
DAN FAUSKE, Chief Executive Officer, Alaska Housing Finance
Corporation, thinks the subsidy will be about $10,000,000 over the
life of the bond, which will be 25 years.
SENATOR LEMAN asks if this will commit the legislature to keeping
AHFC as an entity for 25 years.
CHAIRMAN SHARP responds that it would not do so any more than any
other bond issue does. The chairman asks Mr. Fauske to give a
brief outline regarding SB 163 and SCR 14.
Number 492
MR. FAUSKE responds the loan would be a subsidized 3% loan, based
on a 6% coupon rate on the bonds for the life of the bonds. Under
this scenario, the principal of the debt would be paid by housing,
food service, and other fees generated by the university.
SENATOR LEMAN asks what the figure identified as $1,200,000 private
gift is.
MR. FINK replies that the intent is to solicit private funds.
Number 513
WENDY REDMAN, Vice President, University of Alaska, states the
university strongly supports student housing. SB 163 is integrally
linked with SB 143, which is currently in the Senate Finance
Committee. SB 143 provides for AHFC transfer agreements. AHFC has
made it clear to the university that they will not be in any
position to follow through on SB 163, unless AHFC's assets are
protected.
CHAIRMAN SHARP thinks bonding for student housing is a great
possibility. He does not need to be convinced, but there are
others who still need convincing.
Number 537
SENATOR LEMAN informs Ms. Redman that he has been supportive of the
university in the past, but when things like the Judge Greene
decision and the recent student vote on the Anchorage campus
happen, it causes him to question whether supporting the university
is the right thing to do. If he is to continue to support the
university, he would desire that those types of things not
represent the university policy, or for that matter, even the bulk
of the students attending the university. If that is true he would
be the first to bail out and invest the money somewhere else.
Number 548
MS. REDMAN responds that if Senator Leman finds a way to possibly
control the courts in Alaska, she would be very interested in
pursuing that with him.
SENATOR RANDY PHILLIPS says the court system's budget could be cut.
CHAIRMAN SHARP thinks the legislature will have to look at some of
the smaller campuses, and decide if operating those campuses are
cost effective.
Number 566
SENATOR LEMAN makes a motion to discharge SB 163 from the Senate
State Affairs Committee with individual recommendations.
CHAIRMAN SHARP, hearing no objection, orders SB 163 released from
committee with individual recommendations.